Energy Blue Print
Brazil

Moving from principles to action for energy supply that mitigates against climate change requires a long-term perspective. Energy infrastructure takes time to build up; new energy technologies take time to develop. Policy shifts often also need many years to take effect. In most world regions the transformation from fossil to renewable energies will require additional investment and higher supply costs over about twenty years

download the report Brazil 2013

Climate and energy policy

The energy market still suffers distortions, where renewable energy sources such as photovoltaic solar plants, biomass cogeneration, small hydroelectric power plants and other sources compete with large hydroelectric and thermoelectric plants on unequal terms.This happens because of how each type of energy is priced and imbalances in terms of incentives and tax deductions. Political action is necessary to overcome these market distortions, provide room for sustainable renewable energy sources in the Brazilian electricity mix, and allow them to compete on their own merits.

With the liberalization of the energy market, the growing competitiveness of renewable energy should result in increase demand for these sources. Although this has been happening with wind power in recent years, the other technologies lack political support to attain a position of equilibrium in relation to conventional technology, which has already received decades of financial, political and technical support.

This support can be in the form of measures and laws that ensure suitable financing terms for projects and equipment and energy generation tariffs that ensure a fair return for the investors of these plants. Given the necessary market conditions, renewable energy will contribute to creating sustainable economic growth, high quality jobs, technological development, global competitiveness and leadership in industry and research.


targets for renewable energy

A growing number of countries have established targets for renewable energy, in order to reduce greenhouse gas emissions and increase energy supply security.These targets are measured in terms of installed capacity in megawatts (MW). In Brazil, the target for renewable energy does not make sense, given its share in the electricity mix is close to 90%. However, this high figure is almost exclusively due to hydroelectric plants and the expansion of other sources is based only on their costs and competitiveness in auctions, without considering the other technical or socioenvironmental criteria.

In this sense, targets for the share of biomass, solar and PCHs would be important to develop or maintain these industries in Brazil and diversify the supply of renewable sources.Targets could be implemented in steps for the short, medium and long- term and be adjusted depending on the local or regional potential for each technology and complemented by policies that develop the expertise and the production base in order to produce the necessary amount of energy.

Wind and solar have presented growth figures of above 30% annually in recent years; the process has been documented by Greenpeace, GWEC (Global Wind Energy Council), EREC (European Renewable Energy Council) and EPIA (European Photovoltaic Industry Association) in reports since 1990, which predict their growth to the horizons of 2020 and 2040.The naturally advantageous conditions for sun and wind—Brazilian potential is over 300,000 MW for wind energy and even higher for solar energy—favor the development of these sources in the short and long term.


electricity sector, security and planning

The economic and social development of Brazil requires ever more energy and, as a consequence, the challenge of building an energy infrastructure capable of meeting the needs of the country.The solution for energy expansion most adopted in recent decades—building more hydroelectric plants—has progressively approached its technical and environmental threshold due to the unsuitable nature of reservoirs for the natural characteristics of the Amazon. The variability of rainfall and the reduced ability to store this water for later use has contributed to an increased supply risk for energy in recent years.This scenario does not mean that we should return to the model of expansion using dams with reservoirs.The building of hydroelectric plants will never be acceptable in areas of such ecological importance—such as the Amazon—and in cases of social conflict without consulting and consensus from the populations affected beforehand.

The discussion about energy security raises the need to rethink this structure.To resolve this problem, we need to diversify the Brazilian electricity mix. And contrary to that suggested by the government, we do not need to make room for the expansion of thermoelectric sources that use coal or nuclear energy. We can and must turn our attention to other renewable sources available in Brazil and also to improving energy efficiency.

The development of these energies will only be possible based on long-term planning on the national, regional and local level. Currently we have plans that indicate the evolution of different sources for the next 10 years. But the projections, in addition to being essentially just trends, are not necessarily accompanied by political and financial measures that will make them a reality. Actually, the expansion of the energy production system is based almost exclusively on the economics of the sources offered in auctions than on the need to increase the security of the system and include sources that will complement hydroelectric power plants and compensate for generation when reservoirs are low.

The contracting of plants based only on economic merit has resulted in a concentration of projects in just a few Brazilian states and the strict deadlines for obtaining environmental licensing, construction of the plants and installation of transmission lines has delayed the connection of these plants to the grid. With auctions divided by region, it will be possible to decentralize the generation of energy and efficiently extend transmission lines to these projects, since their location will be more predictable.

A balance must be struck between the renewable and conventional industries. In the 10-year plan, an investment of over 700 billion reais is projected for the oil and gas sector, while complementary renewable energy (wind, biomass and small hydroelectric power plants) will receive only one tenth of this amount.

There are not even projections for investment in other sources, such as photovoltaic solar energy, and newer technologies, such as concentrated solar energy and ocean energy.The government prefers to wait for the prices of these sources to fall globally, when we could be investing now in research and development of these technologies, locking in our place of importance in these areas, as we did decades before with ethanol.


changes in energy policies

Greenpeace and the renewable energy industry have a clear agenda of necessary policy changes designed to encourage the diversification and expansion of renewable energy in the electric energy mix.The changes include:

• Phasing out of all subsidies for fossil fuels and nuclear energy;

• Internalizing the external (social and environmental impacts) costs of energy production, in order to reveal the true cost of the impact of energy generation sources, such as thermal electric plants fueled by fossil fuel, large hydroelectric power plants and nuclear plants;

• Establishing a policy or regulatory framework to develop new types of renewable energy. Ensure that priority is given to clean renewable energy systems and plans for access and integration to the electrical grid;

• Providing defined and stable return for investors, through feed- in tariffs or minimum fair prices in energy auctions;

• Mandating strict efficiency standards for all energy consuming appliances, buildings and vehicles. Implement labeling and environmental information on these products;

• Increasing research and development budgets for renewable energy and energy efficiency.

Conventional sources of energy received around US$ 409 billion in subsidies around the world in 2010, resulting in highly distorted markets. Subsidies reduce the price of energy artificially, keeping renewable energy outside the market and favoring noncompetitive technology and fuels. If the same conditions provided for fossil fuels and nuclear energy were extended to renewable energy, they would be in a better position to expand and develop. And if markets took into account the socio-environmental impacts of the energy sources, the renewable sources would not need any special conditions.


the most efficient manner to implement the energy [r]evolution: security for renewable energy markets

Planning and investment in renewable or conventional energy infrastructure requires a solid framework of long-term policies.

The main requirements are:

a. Long-term security for investment – Investors need to know

whether an energy policy will remain in effect until the debts of the investment are paid off. Investors want a good return on their investment which depends, to a large extent, on inflation rates. If rates of return are not favorable, investment will migrate to other sources or other economic sectors.

b.Transparent Energy Planning Process - A transparent planning process is fundamental for the renewable energy industry, investors and project developers. The licensing process should be equally clear and transparent for both entrepreneurs and groups affected by these projects. And most importantly, planning should not be aimed solely at minimizing impacts and energy costs, but also at minimizing social and environmental impacts and costs.

c. Access to the grid – Equitable access to the grid is essential for renewable energy plants. If there is no available access to the grid or if costs for access to the grid are too high, projects will not be carried forward. For a plant to be feasible it must sell its energy to the grid. In Brazil, the space for renewable sources is bid for in auctions and access to small and medium-sized renewable systems to the grid was regulated only in 2012. Although these systems can now be linked to the grid, there are a series of restrictions that limit generation and connection conditions, which need to be eliminated to maximize distributed renewable generation.

d. Financing for renewable energy – Although wind energy receives adequate financing terms, other renewable sources – especially decentralized generation - does not get the required support. Photovoltaic solar energy receives the worst treatment, since there is still no mechanism available for financing the purchase and installation of solar panels in residences.These sources of energy will only develop given the appropriate financing conditions, which will open these markets and result in economies of scale and lower prices.


caution in the expansion of biofuels

Greenpeace recognizes the importance of the use of biofuels in the transportation and electrical power sectors and their important role in the energy revolution.

However, despite the advantages, the current production of biofuels has generated pressure on both food prices and native forest coverage.The huge potential for biofuels comes with a complicating factor: how to keep these crops from encroaching on land used for food production, by traditional populations and with high environmental value?

In order to optimize the use of biofuels as a part of the solution for climate change caused by CO2 emissions, we must increase the production of the raw materials used, improve the energy efficiency of the automobile engines that use these fuels and expand the variety of agricultural crops that can be used as raw materials for these biofuels. For this migration from fossil-based fuels to plant-based fuels to happen and be a genuine solution for the climate without unleashing other environmental or social problems, Greenpeace believes the adoption of the following criteria indispensable:

1. Zero deforestation : the expansion of crops used for the production of biofuels, such as soybeans, sugarcane, oil palms, in addition to the production of cow fat, should not cause deforestation of native vegetation, push other crops and/or livestock further into the forest, or degrade natural forests or alter other natural ecosystems.

2. Respect for the Brazilian laws: the expansion of crops used for the production of biofuels cannot encroach on demarcated indigenous lands and/or those claimed by indigenous populations, conservation units or areas traditionally occupied by local communities—unless they have been previously consulted and provided their consent. Likewise the labor rights of all the rural workers employed in the expansion of the production of raw materials for biofuels must be respected.

3. Respect for agrarian social movements and family agriculture: the expansion of production of raw materials should not occupy lands under dispute or claimed by agrarian social movements. Biofuels should not be encouraged as the only alternative for generating income on a large scale for family farmers, since these crops, in general, are monocultures and as raw materials for biofuels they are also commodities, subjecting the family farmer to market fluctuations that compromise farming operations and the viability of the farm itself, as promoted by agrarian associations, unions and social movements.

Intensification of the most productive raw materials and investment in research, development and innovation into technologies: in Brazil, currently 80% of the biofuel produced uses soybeans as the raw material, which despite being well adapted crop, with established technology, it has one of the lowest rates of productivity per hectare for the production of biodiesel. A variety of raw materials can be used that present 15 times the productivity of soybeans . Furthermore, it is essential that Brazil invest in the development of technology for the production of second- generation ethanol, for example, to minimize the amount of land needed for the planting of sugarcane.;

5. Criterias for the crops expansion: Production of raw materials for biodiesel should consider the following points:

a. Use of existing technology to recuperate the degraded areas and the precepts of low-carbon agriculture;

b. Use of pastures that can be “freed up” by raising the density of animal occupation, which in some regions of the Amazon is below one animal per hectare. All the impacts related to increasing density must be analyzed: possible pollution of water courses, the occurrence of soil degradation and the production and supply of animal feed without this causing more deforestation. The agricultural sector, especially agriculture and livestock, contributes more that any other to nitrogen and phosphorus pollution on a global level.

c. No competition with the production of food: the expansion of the production of raw materials for biofuels must not occur in areas used for the production of food, especially staples of the Brazilian diet (rice, beans, cassava root, etc.).